Brexit effect knocks a third off UK fintech investment
Uncertainty following the UK’s decision to leave the EU has had a chilling effect? on fintech investment in Britain, according to a trade body.
New figures released by Innovate Finance, a non-profit members? organisation representing over 250 British-based financial technologycompanies, showed that venture capital investment in startups fell to $783m in 2016 a£33.7 per cent drop on the $1.2bn raised in 2015.
The dramatic decrease in fintech investment was attributed by Lawrence Wintermeyer, chief executive of Innovate Finance, to uncertainty surrounding Brexit.
Responding to the figures, Wintermeyer told the BBC that our members tell us Brexit has had a chilling effect on investment.
London’s reputation as a fintech powerhouse has been damaged since the referendum in June 2016 from a triple-threat of Brexit consequences.
Heavily reliant on the European talent pool of workers, tech startups would suffer from an end to freedom of movement. A post-Brexit London would lose EU-funded research opportunities and access to the European single market.
In an official statement, Wintermeyer outlined the priorities of the UK’s fintech community as the government undertakes its Brexit negotiations.
the loss ofpassporting rights will hit fintech firms if’special provisionstothe single market are not negotiated upon leaving the union. However, maintainingand further improving access toglobal fintech talent has’supersededpassportingacross the fintech community’s post-Brexit priorities.
Figures saw China overtake the US for the first time as the leader in fintech investment, as venture capitalists signed deals totalling $7.7bn and $6.2bn respectively. Despite losing a third of its investment, the UK remained third.
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.
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